IAB EUROPE RELEASES ITS ONLINE ADVERTISING EXPENDITURE RESEARCH 2008

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1 IAB EUROPE RELEASES ITS ONLINE ADVERTISING EXPENDITURE RESEARCH 2008 Annual study finds that growth slowed significantly in mature markets to under 20% as search remains the most popular online advertising format Brussels 10th June 2009: The Interactive Advertising Bureau Europe (IAB Europe) has just released the findings of its annual advertising expenditure survey for the year ending December Compiled by IAB Europe then processed and analyzed by PricewaterhouseCoopers (PwC), this report is the definitive guide to the size and value of the European online advertising industry. The 2008 report contains online expenditure data for 19 markets*. In 2008 the European online advertising market was worth 12.9 billion with a likefor-like growth rate compared to 2007 of 20%. In the US, online advertising grew 10.6% in 2008 and was worth 16.6 billion ($23.4 billion). 77% Total growth by country from 2007 to % 45% 34% 33% 29% 26% 22% 22% 21% 20% 19% 19% 19% 18% 9% Slovenia Poland Austria Finland Turkey Greece Spain Norway Denmark Belgium Italy UK Germany Sweden France Netherlands Source: IAB Europe/PwC However whilst the pan-european figure is one of growth, it is no secret that 2008 was one of the worst years for advertising in any medium. The online sector was

2 not immune and experienced a challenging year, particularly in the 10 most mature markets. The key difference is it did still manage growth albeit at a lower rate. Six of the top 10 European markets grew less than 20% The top 10 markets in Europe account for 93% of the total value of the market. Many of these countries saw year-on-year growth rates under 20%. The Netherlands, Europe s early adopter of online advertising grew only 9% in Other mature online markets saw similar trends, with growth slowing in France at 18.5%; the UK, Germany and Sweden at 19% and Italy at 20%. Just beating the 20% barrier, Belgium grew 21% and Denmark and Norway hit a 22% growth rate. Spain by comparison saw relatively strong growth at 26%. 26.0% Growth of formats in % 15.1% 12.2% Search Classifieds Display Source: IAB Europe/PwC Super Search Search remains the leading format in Europe with the strongest year-on-year growth rate of 26%, accounting for 43% of online ad expenditure in the 19 countries measured and a value of 5.6bn. Classifieds are next in terms of year on year growth rates at 17.4%, 26% share of ad spend and a market value of 3.8bn. Alain Heureux, President and CEO of IAB Europe, says In 2008 search and classifieds enjoyed the most growth of the four formats we measured. This can be partly explained by measurement and performance based marketing needs in times of recession advertisers are more focused on proving return on investment for every Euro spent and these two formats are the most accountable in online advertising.

3 Smaller markets enjoying strongest growth The markets outside of the top 10 are currently enjoying the strongest growth. Whilst this may not be hugely surprising as they enter a growth stage whilst simultaneously the top markets mature, it does present advertisers and players in the digital arena with business opportunities in these countries. Poland has experienced a 60% growth rate to bring the market to a value of 253m and Slovenia a 77% growth rate the market is now valued at 19.6m. IAB Europe is able to report on three key Eastern European markets for the first time in this edition of AdEx Croatia, Hungary and Romania offering a more complete picture of this important region. Classifieds Display Search Total online advertising (billion euros) Source: IAB Europe/PwC Alain Heureux, President and CEO of IAB Europe says Overall the picture in Europe is one of growth, but what is clear from these figures and what will surprise no one - is that 2008 was a tough year for online advertising. The focus on search and classifieds underlines just how important making online ad spend accountable is for our industry to develop and grow, and it is why IAB Europe has been supporting research into its measurement. In addition, we firmly believe that the industry will continue to grow through the imagination, innovation and investment of its players. To facilitate this growth, IAB Europe s Public Affairs operation works closely with the European Commission to

4 ensure that the interests of our members and the industry as a whole are represented effectively to legislators. It is only on this solid foundation that the digital advertising industry will continue to evolve and grow through the good times and the more challenging ones. Eva Berg-Winters, Senior Manager at PwC who specialises in new media, said "2009 is set to be a difficult year for online advertising. Decline is likely in a number of mature markets and, where there is still growth, we expect it to be much lower than previously. However, online continues to outperform other media and to increase its ad market share. The post-downturn era should therefore see another growth spurt for online" Media please contact: Lucy Green, PR Consultant (English) Tel: +44 (0) publicrelations@iabeurope.eu; lgreen@greenfieldscommunciations.com Geraldine Gitel, PR Consultant (French/English) Tel: +44 (0) / publicrelations@iabeurope.eu; ggitel@greenfieldscommunications.com Ends Note to Editors: *The data has been compiled by IAB Europe based on information provided by the regional IAB offices around Europe. It is then processed and analyzed by PricewaterhouseCoopers. The report includes market size and value information for the full membership of the IAB Europe in 2008 including Austria, Belgium, Croatia, Denmark, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Norway, Poland, Slovenia, Romania, Spain, Sweden, Turkey and the UK. Croatia, Hungary, and Romania were new to the research in 2008 so no comparative figures are available. About IAB Europe IAB Europe is a federation of national Interactive Advertising Bureaux (IAB) across Europe. Its mission is to promote the growth of the interactive advertising markets on behalf of its clients and national members. Supported by every major media group, advertisers, agency, portal, technology and service provider, its voice represents the interest of more than 5000 company members. IAB Europe coordinates activities across the region including public affairs, benchmarking, research, setting standards and best practices. The member countries are Austria, Belgium, Croatia, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway,

5 Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland, Turkey and the UK. Our corporate members include Alacatel-Lucent, BBC.com, BusinessWeek, comscore Europe, Goldbach Media Group, Google, Hi-Media, Insites Consulting, Koan, Microsoft, Netlog, NewsCorp, Nielsen Online, Nugg.ad, Orange, Publicitas Europe, Sonnenschein, Truvo and United Internet Media. About PricewaterhouseCoopers PricewaterhouseCoopers provides industry-focused assurance, tax, and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across their network share their thinking, experience and solutions to develop fresh perspectives and practical advice. PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. Explanatory note on IAB Europe/PwC AdEx figures: How were the figures reached? Each national IAB runs its own annual online advertising spend benchmark study and the IAB Europe AdEx figure is based on these results. As the methodology for the studies varies country by country, the nature of this project is to represent the figures in such a way as to make them realistically comparable. This involves: Readjusting figures to allow for different original methodologies. Readjustment rates have been supplied by groups of local market experts Estimating data for certain formats in certain countries. Where local IAB studies do not include data on a given format or the definition of a format is substantially different, weighted averages for similar markets have been applied to give an estimated value for the format Where local data is collected in a currency other than Euros, the year-end exchange rate at 2008 has been used to convert this to Euros. To provide data for prior year growth rates, the prior year figures have also been re-calculated using the 2008 year end exchange rate in order to give transparency over the growth rate For France, Spain, Poland and Finland, additional information about 2007 has become available; the 2007 numbers have been updated for this AdEx focuses on display, classifieds, search and . Some European countries collect data on additional formats. The related spend is not included in AdEx. Other information about the figures: Figures quoted are gross figures (i.e. actual invoiced value of the media sold, including agency commission) All estimates and readjustments are conservative All estimates and readjustments have been subject to approval from local market experts and industry analysts

6 We are confident that our figures provide a robust and fair representation of the European internet advertising market based on the IAB Europe network's knowledge of the market. If you have any questions about the data in this report please contact Eva Berg-Winters at PricewaterhouseCoopers at eva.berg-winters@uk.pwc.com